This past week has seen five of Canada’s largest banks announcing their withdrawal from the Net-Zero Banking Alliance (NZBA), a global initiative aligning the global banking sector with net-zero greenhouse gas emissions targets by 2050. The banks involved are: BMO (Bank of Montreal), National Bank of Canada, TD Bank Group, CIBC (Canadian Imperial Bank of Commerce) with the most recent exit being Scotiabank.

A Scotiabank spokesperson – Katie Raskina said, “we remain committed to delivering our Climate Transition Plan, and will continue to finance the transition and support our clients in implementing their sustainability strategies – this is the most important role that we can play.”

The Canadian banks did not explicitly cite US political pressure as the reason for their departure, but simply stated that they can effectively pursue their climate goals independently.

On his first day in office, President Trump issued a slew of Executive Orders and Memoranda. The US President has made it clear that there will be a vast pullback on climate change mandates, as he repealed all climate-focused executive orders from the Biden Administration. For more detail see also: Executive orders and regulatory change – compliance risks in uncertain times.

RBC is the largest Canadian bank to remain in the alliance. However, Dave McKay, RBC chief executive recently said at the Capital Markets 2025 Conference that the alliance was in flux. He questioned whether it was the right mechanism to reduce emissions, adding that “[p]ulling out of NZBA, hypothetically, doesn’t lead to a non-commitment to net zero or climate change.”

These withdrawals follow a recent trend set by the major US banks, including Morgan Stanley, Goldman Sachs, Wells Fargo, and JPMorgan, each also leaving the alliance.

Withdrawals in the asset manager sector

Asset management firm BlackRock has also departed from the from Net Zero Asset Managers (NZAM) initiative citing, in a letter to clients, “confusion regarding BlackRock’s practices” and the resulting “legal inquiries from various public officials” as reasons for its withdrawal.

Following BlackRock’s withdrawal, the Net Zero Asset Managers (NZAM) initiative, a coalition of investment managers representing trillions of dollars in assets and committed to achieving net-zero greenhouse gas emissions by 2050, announced a suspension of its primary activities. This decision comes as the group tries to adapt to a shifting political and regulatory landscape.

During its review, NZAM will suspend the tracking of signatory implementation and reporting. It will also remove its commitment statement, list of signatories, targets, and related case studies from its website.

The NZBA and NZAM form part of the Glasgow Financial Alliance for Net Zero (GFANZ). GFANZ announced a major restructuring and repositioning earlier this month. The group will allow “any financial institution” supporting the green transition to participate. Therefore, membership of a sector alliance such as NZBA will no longer be a requirement.

European banks expected to respond

The FT has reported that the top banks in Europe are also reconsidering their membership of NZBA. According to one person familiar with their thinking, “they will be begin the process to leave” if NZBA doesn’t follow NZAM and end “all formal tracking and any issues that are perceived contrary to US antitrust.”

UBS CEO Sergio Ermotti said he’s looking at whether to follow his Wall Street peers in abandoning the climate-finance alliance, as lenders seek to protect themselves from intensifying political pressure. He made the comments during a discussion with Bloomberg at the World Economic Forum’s annual meeting in Davos, Switzerland. 

Corinne Tomsett at Danesmead ESG said: “It is a shame to see fears around anti-trust issues continuing to spread beyond the US and into Canada. There are clear benefits to the scrutiny and accountability that organisations like the NZBA provide making it disappointing to see further organisations reconsidering their membership.

“It is nonetheless reassuring that banks aren’t saying they’re dropping their pledges completely.”